US ad market heads for record year

News, 26 August 2016

LONDON/NEW YORK: The value of the US advertising market is expected to grow at its fastest rate since 2010 this year, with adspend set to rise 5.8% to a record-high of $178bn, according to new research from Warc.

Warc's latest US Ad Forecast, published today, outlines ad expenditure expectations across seven major media channels both this year and next.

Among the report's findings is evidence to suggest that the US ad market will grow at over twice the rate of the wider economy in 2016.

The 5.8% growth in total advertising spend anticipated this year represents an upgrade of 0.9 percentage points since Warc's last forecast in December, owing to a more positive outlook for both TV and internet (including mobile).

Following a 3.5% dip in 2015, TV adspend is forecast to rise 6.6% to $68bn this year, boosted by increased spending around the Rio Olympics and the US presidential campaigns.

Such growth is expected to enable TV to retain its position as the largest advertising channel by value in the US and, by extension, the world in 2016.

The difference will be marginal, however, because internet adspend is forecast to rise 13.7% this year to achieve near parity with the value of the TV ad market.

The inflection point will come next year, the research shows, as TV adspend is then expected to dip by 4.5%, removing some $3bn from networks' combined annual advertising revenue.

By contrast, online ad expenditure growth of 12.5% is forecast for 2017, giving internet the greater share of total US adspend for the first time.

Warc believes approximately $76bn will be invested to reach US consumers online next year, around half of which will be for mobile-specific ads.

Elsewhere, adspend growth is forecast next year for cinema (+5.1%) and outdoor (+3.3%), although newspapers (-12.7%), magazines (-12.4%) and radio (-2.8%) are expected to record declines.

The report also notes that for every man, woman and child in the US next year, $553.70 is expected to be spent on advertising, up $60 from five years earlier.

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